Whether the Japan Earthquake or a CEO’s resignation, here’s what to do when a crisis hits

There is no shortage of crisis these days but unfortunately there also seems to be an overabundance of missteps and mishaps that turn corporate crises into corporate disasters. Worse, disasters could have been prevented had companies and institutions followed three simple steps: (1) Prepare for a crisis (2) Tell the truth (3) Develop a consistent message.

Prepare for a Crisis — Crises are like accidents. Like individuals and accidents, companies don’t think crises will happen to them. Regardless how well-managed, crises today are part of business life. Given the community nature of the global economy, the recent Japan earth quake will touch nearly every company’s ability to serve their customers because the disaster interrupted nearly everyone’s supply chain. If it didn’t directly effect a company’s supply chain, customers are worried that it will. How many companies were prepared to communicate instantly to customers the affect, more importantly the non-affect, that the disaster had on their ability to deliver product? How many companies efficiently communicated that information to financial analysts and Wall Street? According to the trade press and the drop in stock index, the answer is precious few.

The key is preparation. Have a crisis communications plan in place. A plan includes an inventory of events that could trigger a crisis, a flow chart that defines who initiates the crisis communications plan, a list of executives who’ll provide information, consensus, and approval of crisis impacts and communications, templates that can be used to quickly communicate information and media, analyst, management, union and employee contact lists where to send the information. Preparation means establishing strong editorial and analyst relations ahead of time. Preparation means conducting a mock crisis drill at least one a year. Preparation means knowing what needs to be done so that even in the midst of chaos, communications can take place efficiently and effectively

Tell The Truth, Tell it First and Tell it Often — The truth is surprisingly elusive during a crisis. What people think they saw, heard, and overheard can take on the force of fact.

It is important, regardless of the damage to be forthcoming. Equally important to being forthcoming is to be the first to tell the truth. As tough as it may be in this Twitter-saturated world, owning the truth is as important as telling the truth. While getting it right is paramount, getting it right and communicating quickly is even more important. And while facts around a crisis evolve, it is important to be the first with most recent updates.

Develop and Communicate a Consistent Message — Inside every crisis there are two or three outcomes that are of utmost importance to stakeholders. Identify those outcomes early on. Consistently communicate about those outcomes and, most importantly, use consistent language when communicating so that the message sent to the financial analysts is the same message sent to employees and is the same message sent to the media.

Into every corporate life a little rain will fall. How well a company responds to cloudy times will ultimately determine its long-term success. If prepared to take a leadership position, to tell the truth first and often, to communicate consistently, companies will emerge from crises stronger and with a more important value proposition.

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About businesspracticum

Chuck Byers is the Managing Director of Business Practicum & Adjunct Professor at Santa Clara University